Productive Labour - Part 2 of 15

Marx's analysis of productive labour may seem rather esoteric. In fact, it is central to his theory. It ties together his analysis of value and surplus value, and it separates Marx's analysis from that of Adam Smith and all those who followed him.

Marx's analysis of productive labour cuts like a scalpel through the confusion of Smith's analysis. The confusion in Smith's theory stems from a contradictory duality, which sits at its heart. As Marx demonstrates, Smith has two definitions of productive labour, just as he has two definitions of value. Smith's first definition of productive labour is correct, but his second definition of productive labour is false.

But, linked to this is the fact that Smith starts out with one theory of value based upon labour-time, a labour theory of value, and a second theory of value based upon cost, a cost of production theory of value. Similarly, Smith has two theories of surplus value. One theory correctly starts from the Physiocrats analysis that the basis of surplus value is the difference between the value of labour-power and the value created by that labour-power, but goes beyond the Physiocrats by correctly analysing value as labour rather than use value. His second theory, of surplus value collapses back into Physiocratic conceptions based on use value, and so incorrectly sees surplus value only arising on the basis of material rather than immaterial production, with a consequent impact on his understanding of productive and unproductive labour.

Tied to this is the fundamental error made by Smith, which forms the basis of modern orthodox economics that the value of the commodity – and also, therefore, of GDP, or total commodity-product – can be divided into the factor incomes of rent, profits, wages and interest.

Smith correctly defines productive labour as that labour, which exchanges with capital. That is that labour which produces surplus value. Marx points out that, of course, you can define productive labour in all sorts of ways, dependent upon what it is you are seeking to analyse. If you are seeking to analyse what makes a society moral, or spiritual, all sorts of activities that are profitable might be considered unproductive, in that they act to promote immorality etc. But, for the purpose of studying the functioning of the capitalist system, which is the purpose of political economy, the correct definition is that it is labour that produces surplus value.

A cook employed by a capitalist, in his house, to provide his meals, is an unproductive labourer. The wages paid to the cook are paid out of the revenue of the capitalist, that is out of his profit, or the interest received by the capitalist, used by the capitalist to cover his personal consumption, not his productive consumption of capital.

Once the cook has provided the meals, the capitalist eats the food and that is the end of it. In order for the capitalist to employ the cook, to provide them with meals again, the capitalist must obtain revenue themselves again, to cover the cost of the cook's wages, and of the food consumed. In Theories of Surplus Value, Marx demonstrates that where the same cook is employed by a restaurant, their labour is then productive labour, because the restaurant would obtain surplus value. The restaurant does not exchange revenue with the cook. It is an exchange of revenue with capital.

The restaurant has capital, in the form of money-capital. It employs the cook. The money-capital ceases being capital, when it is paid to the cook as wages. The capital value stays where it is, in the hands of the capitalist. The capital value casts off its money shell, and it is only that money shell, which passes as wages into the hands of the worker, in exchange for their labour-power. As wages, it becomes merely money, forming revenue for the cook to spend so as to reproduce their labour-power. The cook does not own capital, but only a commodity, labour-power. At the same time that the money-capital metamorphoses into money wages, the workers labour-power metamorphoses into productive-capital, of an equal capital value, in the possession of the capitalist.

The labour-power then becomes the property of the restaurant. It is now productive-capital, and the capital value of the money-capital has been metamorphosed into the productive-capital. The product of the cook is no longer consumed by the buyer of the labour-power. It is sold, as a commodity, by the restaurant. In selling the commodity, the restaurant recovers, in its price, the value of the materials, required in the production of the food, and all the other constant capitaladvanced, by the restaurant; it recovers the wages paid to the cook; and in addition it recovers the surplus value produced by the cook. This surplus value arises, because the value of the labour-power of the cook is less than the new value created by the cook.

About Me

Left school at 16. Became an ASTMS shop steward at 19, and a lifelong trade union activist. Delegate to North Staffs Trades Council 1974-87. Secretary North Staffs Miners Support Committee 1984-5. President North Staffs Trades Council 1985-6 and 1986-7. Delegate to Staffordshire Association of Trades Councils 1985-7. Delegate West Midlands Regional Council of the TUC 1985-7. Secretary Newcastle UNISON 2000-2.
Member of the International Communist League/Workers Socialist League 1974-87.
Went to University as mature student at age of 24. Obtained Joint Honours Degree in Economics and Politics with Philosophy and Statistics, followed by a Post Graduate Certificate in Education.
Labour Party member since 1974. Stoke City Councillor 1983-4, expelled from Labour group 1983, and resigned from Council in 1984 because of refusing to vote for rent and rate rises, and budget cuts. Staffordshire County Councillor 1997-2005.
Assistant Secretary Stoke District Labour Party 1981, and held pretty much every position from Executive member, to Branch Secretary, and Branch Chair.